Mumbai, Feb 9 (NationPress) In a significant milestone, Domestic Institutional Investors (DIIs) have, for the first time, surpassed Foreign Institutional Investors (FIIs) in their ownership of the benchmark Nifty50 index, according to a recent report.

Data from Motilal Oswal Securities reveals that as of the December 2025 quarter, domestic institutions accounted for approximately 24.8 percent of the Nifty50, slightly exceeding the 24.3 percent held by foreign investors.

Analysts noted that this FII ownership reflects an eight-quarter low, indicating a more robust domestic capital base. This shift is seen as structural rather than merely cyclical.

While domestic investors had already eclipsed foreigners in total equity ownership, they had lagged behind in the Nifty50 until this latest quarter.

Market analysts highlighted the remarkable influx of systematic investment plan (SIP) contributions, totaling Rs 3.34 lakh crore in 2025, along with increased pension fund participation and the arrival of new asset management companies as key drivers of this trend.

Moreover, domestic institutional investments, including allocations from the Employees’ Provident Fund Organisation (EPFO) and insurance contributions, have facilitated this transition and are expected to stabilize rather than reverse, even in a market correction.

Over the previous five years, domestic inflows have significantly bolstered market performance, despite foreign investors divesting nearly Rs 9.96 lakh crore cumulatively.

Brokerage data indicates that foreign institutional ownership in the Nifty50 declined by 90 basis points year-on-year and 20 basis points quarter-on-quarter, while domestic institutional ownership increased by 170 basis points year-on-year and 30 basis points sequentially.

During this quarter, foreign investors reduced their stakes in approximately 78 percent of Nifty50 constituents, whereas domestic institutions raised their holdings in around 82 percent of the index.

In terms of value, assets under management for domestic institutions reached about $24.8 billion, surpassing foreign holdings of roughly $24.3 billion.

Interestingly, India's modest market performance last year (Nifty return of 10 percent) occurred alongside substantial DII investments of Rs 7.44 lakh crore, overshadowing total FII sell-offs of Rs 166,283 crore.

A recent report attributed this to lackluster earnings growth and resultant high valuations, suggesting that favorable developments, such as an India-US trade deal, could potentially restore FII interest.